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gaphepcmp

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Posts: 3
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We manage a small retail strip in NC. We have a tenant that was evicted for non payment of rent. So obviously the lease was broken and the tenant will not receive his security deposit back. My question for anyone out there is: Can we use the security deposit to pay for the management fees each month while we are trying to release the property?  After all we would have collected the management fees each month if that tenant had stayed true to his lease. I just need to make sure this is legal to do.

OHlandlord

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Posts: 3,814
Reply with quote  #2 
That would depend on your agreement or contract with the owner of the property.  Most management fees come out of rent received, not from deposits.  The deposit is to pay for damages the tenant causes.  If the deposit is kept for the rent for the next month, you could conceivably collect one month of fees from that deposit, but not future months's fees since no rent is collected during that time.
gaphepcmp

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Posts: 3
Reply with quote  #3 

Basically the owner never receives proceeds, the rents go to pay for the expenses.  So in my mind we transfer the security deposit into the owners account and since we are still managing that unit we should still be able to collect mng fees from that.

OHlandlord

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Posts: 3,814
Reply with quote  #4 
Why would he never receive rents?!!!  If the place is in that bad of shape, it should never have been rented in the first place.  And since this is commercial property, why is the owner paying for all these repairs?  The repairs should be on the business once they take over.  Repairs are on the LL in residential property, but commercial tenant make their own improvements and repairs to anything except major systems.  If there is no tenant in the unit., you should not be collecting management fees since you aren't managing anyone in the unit,.
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